Trading Places with Tom Bowley

About the author:Tom Bowley co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years.
His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading.
A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015.
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Latest Posts

Market Recap for Friday, March 16, 2018
There was an industry-wide rally in energy stocks (XLE, +0.89%) on Friday and utilities (XLU, +0.88%) also performed well. The latter looks much better technically, however, as it has broken above its 50 day SMA. There's still much work to do and clearing price resistance will be Job 1:
The two blue circles highlight the bullish PPO centerline crossover and the approaching golden cross where the shorter-term moving average (20 day) crosses above the longer-term moving average (50 day). These are positive developments, but
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Market Recap for Thursday, March 15, 2018
It was just another day of bifurcated action on Wall Street. But this time it featured a strengthening Dow Jones. The Dow gained 0.47%, while the S&P 500, NASDAQ and Russell 2000 fell 0.08%, 0.20% and 0.49%, respectively. From a sector perspective, it was a mixed bag as industrials (XLI, +0.29%), technology (XLK, +0.06%) and financials (XLF, +0.03%) were the only winners, while the day's big loser was materials (XLB, -1.31%). Specialty chemicals ($DJUSCX) has really struggled since failing to make a short-term price breakout
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Market Recap for Wednesday, March 14, 2018
The U.S. stock market continued its bifurcated ways on Wednesday. While all of our major indices declined, it was not across-the-board selling. The Dow Jones (-1.00%) saw the brunt of the selling, while the NASDAQ Composite (-0.19%) outperformed by a mile again. A theme began two months ago and it's accelerating. Money is rotating away from the large cap behemoths found on the Dow Jones and gravitating to the tech-laden NASDAQ. Here's a visualization:
There have been a number
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Market Recap for Tuesday, March 13, 2018
It appears to be a case of "too much of a good thing". Technology stocks (XLK, -1.15%) retreated off of a 60 minute negative divergence and that reverberated throughout most parts of the NASDAQ (-1.02%), which led our major indices lower on Tuesday. Internet stocks ($DJUSNS, -1.99%) were unable to keep up with software ($DJUSSW), semiconductors ($DJUSSC) and computer hardware ($DJUSCR) - all of which broke out to fresh new highs this week. The DJUSNS backed down just as it approached overhead price and gap resistance:
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Market Recap for Monday, March 12, 2018
While we saw bifurcated action on Monday, it was still mostly bullish action. For starters, the more aggressive NASDAQ (+0.36%) and Russell 2000 (+0.25%) finished in positive territory while the safer indices - Dow Jones (-0.62%) and S&P 500 (-0.13%) - lagged. It was mostly positive action from a sector perspective as well. Granted, utilities (XLU, +0.43%) was the best performing sector as the 10 year treasury yield ($TNX) continued to meander in consolidation mode. But there was strength in aggressive sectors
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Market Recap for Friday, March 9, 2018
The U.S. stock market was back to its old bull market tricks on Friday as the NASDAQ powered 133 points higher (+1.79%) to close at 7560.81 - its highest ever - and end its correction that began with the high volatility selloff in late-January and early-February. For those in the bear market camp, let me just say they don't start with all-time high closes on the aggressive NASDAQ Composite. The strength and bullishness didn't end with the NASDAQ. Money rotated to aggressive sectors as well. Financials (XLF, +2.41%) and
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Market Recap for Thursday, March 8, 2018
It's never a great signal to see the stock market rally and the three defensive sectors - consumer staples (XLP, +0.91%), utilities (XLU, +0.74%) and healthcare (XLV, +0.67%) - sit atop the sector leaderboard. But we also shouldn't overreact to one day's trading. If we see another S&P 500 all-time high in the next few months and this type of defensive leadership continues, then we'd be talking about a major warning sign. Again, let's not overreact to one day. A big jobs report was awaiting on the horizon, so it could be
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Market Recap for Wednesday, March 7, 2018
It was a day of bifurcation, but it was good bifurcation - if that makes any sense. When the stock market jury is split as we saw on Wednesday, I prefer that our aggressive market areas perform well and defensive areas lag. Well, the very aggressive small cap Russell 2000 ($RUT) was the leading index, gaining 0.79% on the session. The NASDAQ rallied 0.33%. The more defensive benchmark S&P 500 nearly completed its intraday comeback attempt, finishing down just 1 point (after being down 26 points, or nearly 1% earlier in
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Market Recap for Tuesday, March 6, 2018
Materials (XLB, +1.10%) and consumer discretionary (XLY, +0.69%) led a modest stock market rally here in the U.S. on Tuesday. The small cap Russell 2000 gained more than 1% to once again outperform its larger cap counterparts. The NASDAQ also outperformed, continuing its recent history of outperformance. Check out how both the NASDAQ and Russell 2000 have been performing relative to the benchmark S&P 500:
While they've both been strong on a relative basis recently, clearly it's the NASDAQ that has shown consistent
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Market Recap for Monday, March 5, 2018
The Dow Jones surged on Monday, gaining 337 points (+1.37%) to lead all of our major indices higher. Two stalwarts - Caterpillar (CAT, +3.24%) and Boeing (BA, +2.34%) - were the leaders, but we saw 29 of the 30 Dow components gain yesterday. The one bad apple? No, it wasn't Apple (AAPL, +0.35%), although this tech giant did finish 28th out of 30 within the Dow. The shoe just didn't fit for Nike (NKE, -1.27%), which had the distinction of being the "sole" Dow stock to finish in negative territory on an otherwise very
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Market Recap for Friday, March 2, 2018
The Dow Jones finished with a 71 point loss on Friday, thanks in part to another very weak performance by McDonalds (MCD). Apparently, their $1, $2, $3 menu is falling short of expectations and it's clearly reflected in recent price action. MCD now has a SCTR of 11, placing it on a par with Proctor & Gamble (PG) and Merck (MRK), but still soundly beaten (in a bearish way) by General Electric (GE), which remains under significant selling pressure.
Outside of the Dow Jones, however, market action was quite solid on
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Market Recap for Thursday, March 1, 2018
Any time the Volatility Index ($VIX) rises 13%, it's not going to be a great day on Wall Street. Fear equals selling and selling is exactly what we saw on Thursday. There was a bit of a late day rally, but it wasn't enough to avoid a short-term price breakdown. I posted previously that a key short-term price support zone on the benchmark S&P 500 resided at 2690-2700 and we lost it yesterday:
The 1.33% drop in the SPX now appears to set us up for a test of gap support in the 2620-2635 area.
Only
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Market Recap for Wednesday, February 28, 2018
Outside of the final two hours on Wednesday, it was a fairly boring day. We gapped higher at the open, sold off to fill the gap, and then moved back into positive territory..until the final two hours. Selling returned in a big way and volume increased as traders decided to book profits from the latest advance and watch from the sidelines. On the S&P 500, which fell over 30 points, or 1.11%, on the session, the key upcoming support level is in the 2690-2700 area, as identified in the chart highlighted in the Current
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